(Yicai Global) April 18 -- Shares in Goertek plunged by the exchange-imposed limit today after the Chinese smart acoustics equipment maker said that net profit plummeted 88 percent in the first three months from the same period last year after its main customer Apple withdrew its business in November last year.

Goertek’s share price [SHE:002241] sank 10 percent to close at CNY20.30 (USD3). The stock has gained 20 percent in value so far this year, though.

Goertek logged net profit of CNY106.2 million (USD15.5 million) in the three months ended March 31, while revenue surged 20 percent to CNY24.1 billion (USD3.5 billion), according to the Weifang, eastern Shandong province-based firm’s first-quarter earnings report released yesterday.

For the year 2022, net profit tumbled 59 percent from a year earlier to CNY1.7 billion (USD247.3 million), while revenue soared 34 percent to CNY104.9 billion (USD15.3 billion), according to its annual report published the same day.

The company had warned back in December last year that profit for the year was likely to slump between 50 percent and 60 percent from 2021, citing the loss of an order for a smart acoustic product from one of its major foreign clients. The order was for Apple’s second generation AirPords, according to an analyst.

There are probably problems with Goertek’s production, because California-based Apple did not cancel the order due to lack of demand, Kuo Mingchi, analyst at TF International Securities, said at the time.

The company is in close communication with the client in order to find a solution and ensure the normal operation of its other businesses, Goertek said in the report. Goertek increased its provision for asset impairment out of discretion and this contributed to the decline in profit.

But this year should be better. Goertek has received new orders from Apple for the AirPods Pro 2 and its next-generation smart speaker the HomePod Mini2, Kuo said in February.

Apple accounted for over 30 percent of Goertek's total revenue last year, Goertek said in its annual report. Goertek entered the Apple supply chain in 2010 and became the world’s second-largest AirPods assembler in 2018.

Editor: Kim Taylor